GTS - Earnings call transcript Q4 2019 | Triple-s Management Corp

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Operator

Greetings and Welcome to Triple-S Management fourth-quarter 2019 conference call. [Operator instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Garrett Edson, Senior Vice President of ICR. Please proceed sir.

Garrett Edson

Thank you, and good morning. Management earnings Triple-S call. the to fourth-quarter conference XXXX Welcome Vice Garcia, your Chief Juan With Financial Executive are Bobby Jose and President Officer. the and us today Triple-S host and Chief of Executive Roman, President Officer

addition, of Care President will Officer Q&A. Managed during Madeline Hernandez, available In Operating and Chief be

company's to everyone call be also which access announcement, website triplesmanagement.com. was the the at now, By have released which may found earnings should prior this on to

each These statements and thus hear that on Triple-S efforts, we in best of information. need actual be to will involved can results we their today's management may sharing Before call. formal provide what everyone uncertainties you executives begin remarks, from be statements by the and differ business. remind forward-looking company's they forward-looking management's risks the quarter, current view future Despite and materially affected such will

These statements should of placed reliance guarantees be upon performance undue therefore future and are not them. not

law. projection factors available of disclaim call the release during information financial based Exchange on and to update the is to filings For section Each obligation news the today's that any unless refer further the Securities in with could information safe please and made the by information this statements statement to company statements forward-looking the required of of as We us projections this herein, impact date Commission. on call. harbor contained and forward-looking and and company's our

www.triplesmanagement.com. the being on at investor available after ends shortly In website webcast the an be will of portion the addition, and this call archived is version relations call company's

and and at one you distribution to will you cannot moving to download you a If you add get release, of the forward. we can list the can us contact XXX-XXX-XXXX copy immediately

call the Garcia. With go to turn Bobby I'd now like Please ahead. to over that,

Bobby Garcia

XX.X% increase you the Thanks, revenues from operating This a us year. million fourth of we'll for $XXX.X Garrett prior everyone. good today. joining morning, report quarter, and for Thank morning, total the

the share line, prior we adjusted net $X.XX of recorded per $X year diluted to income the compared net share or bottom period. income of $X.XX in diluted million On adjusted per million or $XX.X

Managed off and successful XXXX both primarily growth X,XXX Care These our premium line, strong rates over exceeded Advantage as reflecting season expectations net of report top rendered segment. with January membership new in the capped members ended CMS a core XXXX. the appropriately a XXXX for bottom membership Medicare X, initial most that solid company's results and recent date. and across is enrollment

and MA, year XX% membership now our basis grew points share a year-over-year we market maintain in a XX% Importantly, up XXX ago. from

to possible field quickly including renew in existing our in success fully XX% was thanks very innovative adapted resulting increase that premiums membership of and equal our offers supplemental same sales benefits efforts increase brand year. member managed and menu an over strategies a retention Likewise, to that as rate high XX% flexible upward XX,XXX the retention of and members. focused well products trend continued choice a in with last smart of historically its months as period quarter, Our plan a competitive fourth of that non-medical a the insured X.X% commercial to

partnership thank those reflect with to also I whom in to and provider of It work. like experience points their teams, in These people long-term would sound on strategy a focused the unique many results marketing integrated for retention sales our from community. a determination personally and product the healthcare hard providing design to

aftershocks Puerto on to expanding following Rico activity The of strategy in take few Before earthquake XXXX. and X.X days. island progress that our first to of the would the minute a seismic experienced numerous address shook magnitude our ongoing in and weeks on I the like transformation, the January a X

They its damaged initial $XXX of and But Puerto in total other extent earthquake-related of island Rico. Loss Damages put the been calculating limited Rico damages. structures at wide the the estimates in Southwest estimates scope. homes million. losses hundred and several Puerto have vary government and South is still

has of this As $X.X that total expects our of XX program. received earthquake approximately related than X% million expenses. approximately today, be the We related exposure will the deductible million company and related of losses and claims to less reinsurance $XX our to reinsurance estimate event

provided in reserves morning. we the all in this P&C and with claims reserved to major this claims respect an we new were quarter and segment update pending developments adequately fourth release earlier date. remains believe to the Separately Hurricane handle our remaining Maria, earnings There on no to

network. Now back of our workforce, taking hold investing and Triple-S' as that the despite transformation. the segment the to of we is developing Hurricane our Since of result XXXX our have systems, Maria, capabilities strengthening provider membership growth setback processes a and been and core streamlining multi-year managed in

the offering to progress ecosystem market programs of is of building system of customers this I'd that partnership population building and seamless to by Puerto care in aim system. by by the like delivery a healthcare laying few interoperable in the We around and clinical with highlight and this our alignment and healthcare. enabled achieve is initiatives, quality care. the blocks. In lead technology we vision service made integrated delivery the of providers XXXX, to the outcomes financial Rico Our in high-value management to an access important foundation health

We significantly incorporate earlier more field settings. disease best-in-class to up stages ramped expanding in XXXX in a productivity health allowing plan on support This case the functionality nurses First, tool's and conditions and development. address functions time in to clinical care the Essette, spend XXXX platform core of management this caring to has at our of automated teams, across strengthen our licensed we to utilization, HMS for improved enable the authorizations management we our of capabilities patients. analytics various

This in Optum adoption transferred has reduce our late accelerate to and low functions, maturing inventories claims helped levels. XXXX cycle Second, our payment automation. we have robotic the through to historically the process continued claims processing of

technology during the Optum high Triple-S to of platforms resiliency availability, center core migrated to business Third, of This state our Microsoft real-time that quarter capabilities. art and of our by transition backbone data a its Azure Tier the has administered facility the connection. capacity III and continuity a reliability cloud high a fourth of the XXXX, through completed enhances significantly added level

island. phase, initial on island Finally, focused clinic, the of network. area ambulatory Metro XXXX, fourth multi-disciplinary had San March an end, by strategic in which clinics be wide ambulatory of seven aggregation we the year we the in an will around locations the Juan eighth open in also Beginning will build-out care completing our opened

During platforms, these XXXX, clinics through a and we member experience. will common service focus distinctive programs on integrating clinical

selected primary specialty commercial and Medicare Advantage radiology, offer plans. preventive a care, clinics and the services these laboratory in services, pharmacy single location health Generally, of several care, members to

operating XXXX. year-end, and in in primary first As of also four care improving are of this Together, more facilities workplace to of of the clinics urgent expect during goal aims four quarter we clinics the and healthcare our groups Rico. medical quality XXXX to two our Puerto network shared of centers workplace open support

guidance. XXXX, the company following into further is XXXX look we full-year the As initiating

expect $X.XX Care includes net $X.XX operating earned $X.XX billion, revenue Managed between premiums billion which between and billion. We $X.XX to billion and be

and is between XX% Our expected expected consolidated while claims between MLR XX.X% be incurred Managed XX% Care be to XX.X%. and ratio the to is

operating our between expected ratio and expect The to We XX.X% be tax be effective XX% consolidated rate XX.X%. to and between is XX%.

diluted company's $X.XX $X.XX. at our per of casualty in $X.XX expectations the segment between outlook recent for adjusted and activity diluted and income These consider property Puerto per Finally, the to and net share incurred the approximately January. earthquake during estimated after impact share is related experienced Rico losses

income. count company potential of repurchase excludes is not activity realized gains during diluted net our full-year diluted for well XXXX assuming we unrealized as and with up, account average pleased any a The share losses Adjusted and each throughout XXXX. the also across share share income made shares. businesses of equity any private as Summing XXXX. million are investment per does weighted It advances quite XX.X investment for

approach on is centered a to our strategy implement continue focus committed and to outcomes. We disciplined to quality patient that

to financial I'll address now Juan Jose ask our results.

Juan Jose Roman

a this growth season. Triple-S a completed to premium of and enrollment with another quarter and on solid XXXX Thank We everyone you, open good for successful Bobby morning call. strong

first net income year reported diluted and quarter, GAAP of share per $X.XX we income share of period. the the diluted adjusted to $X.XX prior For $X.XX net GAAP and net $X.XX compared per income per in of per share share of adjusted loss net

last Managed membership the rose quarter rate me premium million Care same an the Medicare in average earned premiums or over the with reflecting discuss detail. for premium year, the higher primarily all core. Medicaid now segment lines higher business of Care rates membership the primarily business Managed in XX% Let businesses. XX increase and The increased period average our in reflects Medicare in average and in results

These than premium lower Care this offset year, the HIP businesses. XX at XX.X% MLR increases suspension through. by were partially the impact XX year-over-year, last Managed and was points were of claims million year's MLR's commercial while pass Fee the Medicare up basis of lower in reflecting the

higher required high-cost, documentation the of high the by mainly business commercial to payment need experiencing our Medicaid loss providers the high-cost, Medicaid effect from Medicaid on is timely moratorium classification and to were These on is increases decreases These ASES and obtaining our population in MLR and basis the HIP challenges with members. support the in the in the Fee need MLR ratios. offset high of partially the and a due the challenges recognition of XXXX

on two We're fronts. dealing issue this with

we to membership. the last the to have challenges ASES respect quarter, working First, on cost, mentioned they need of high high as with the continue with recognition work

make working expect sure acuity meeting that each with rates providers conditions we with we our support stabilized, of process the counters properly our relative Second, is and going that also membership. align data will forward. documented Once to acuity this member's are to are premium members'

operating and provision quarterly Moving personnel costs. million on the from Care increased for higher debt Managed reflecting bad ago, to XX year operating segment expenses, a the expenses

on mainly noted fee earnings to which HIP Medicaid prior a in XXXX to due incurred enrollment promotion These the open which We the also would business moratorium. due higher Medicare seasons. offset our the decrease and commission calls were were we by and and partially expenses, have increases occur

up costs. to primarily The Property approximately premiums prior-year operating mostly Cancer deferred from $X were Let million segment's Life amortization me lines decreased premium X% and the business. comment due & segments the higher acquisition by period, Individual segment. and reflecting of million growth of on income earned $X.X in briefly Casualty Life our to

operating to earned impact of sales million increased of commercial than of quarter last quarter million, reinsurance costs this net same million, XX income operating including higher premiums XXXX, last The contract the products. were in was million year. loss X.X and reflecting reinsurance compared year, P&C the X X.X the during higher multi-year segment's

The assessment, premiums fourth this includes reserve approximately XXXX in renewals in future commissions recovered of by includes through earned. and fund quarter incurred development. the net favorable net quarter to be business due which is year surcharges X.X and new higher to prior guarantee million of The a million X.X increase premium period expected

our higher overall XX, tax than of to the gains were X.X period the prior-year December Total expense impact losses. million income consolidated as X level results, and million Returning the parent and to XXXX. million, investments was at company of due cash unrealized XX mostly

effective board program authorized of quarter's our As last directors repurchase the November on to our share call of discussed XXXX, million. XX our expansion we

cost shares XXX,XXX of were During repurchased at XXXX, the XX aggregate million. an fourth of quarter

As available overall operating on strategy and XX, results under further with remain progressing We're our in million focused strong of Care remain pleased our February XXXX our program. Managed for initiatives. go on repurchase key the XX

Q&A our Operator, for call the open session. to proceed now will questions. please We

Operator

session. is Thank Peter, conduct a you. line live. At time this we'll your question-and-answer [Operator Instructions]

speak. You may

Peter Costa

Hi. Good morning.

to this First, in but we expected in adjustment any the time some When February business. to the see that had that quarter's third then or this some expect point XXX% should that MLR? trended gone there problems Is might at the business in start up is retroactive. point? improvement any continue with into retroactive some resolution Medicaid at of expected let's expectation We this over quarter, MLR this of quarter. be in Medicaid we

Juan Jose Roman

Peter. morning, right. This Jose. are Good is Juan you Yes,

reconciliation our high-need complete of to high the cost, ASES with working accounts continue the of membership. We

in some additional is general, to membership that some QX do MLR in compared expect have We on so process, be premium or term We of as will and and submitted to that related the in we're working and possible more the QX retroactive be the premiums XXXX. stabilize, QX. of stable will of information to the

to and the rates forward we in that now increase are there that stabilization addition November premium an fact do in seeing going So we expect effective X. was

Peter Costa

that rate we on considering very the go increase help Where didn't that happening do Is February X you've much now really higher. MLR the date you late? to that is talked not November continued The stand about? or

Juan Jose Roman

No.

to continue them. with We work

we is much completed, information of said, a the stage but that will we significant and be process approaching it is we that it completed. amount of I the But final Once submitted understand know week. is process As complete have premium how any of not are collected. to will be our target we will this retroactive,

Peter Costa

you. Thank Okay.

Let's move little on bit to a the here. earthquake

the a charge seven say there X.X there at roughly? quarter, million a million, EPS million then I in the was net I X looks of but change dollar of think What's I terms look that or understood of that It charge. charge you and to impacted. amount more the the of something like the

difference do expect plus is restatement will Peter. million. the around plus Yes, deductible that $X we The X.X a be is expense

So the reinsurance $X.X impact, of all in, program. million the is reinstatement total around but the

Peter Costa

higher the forward? for that's So cost reinsurance coming

Juan Jose Roman

No. a It will restatement because on March. program ends the be

So the around restate cost million. and will use program will event, $X the then catastrophe program will since for we we this us it

Peter Costa

cost. That's the incremental

Okay.

to going quarter. going you this in impact forward that's Now

to any You capital it where earnings. ongoing relative beyond really the or it's a is putting earnings. capital tighter consider perhaps there selling getting to to know it's more generating Is you that, back something into you find and what or bring contribute to to there generate not capital? if that business is and run business you and been that the that to in to is run it continue it off, can't point business time where expect didn't buyer We're

Juan Jose Roman

our The have be expect some is will We for really – QX the year assessment. that projection segment that like are profitable. the an for that guarantee do loss, items that non-recurrent, the

So QX is an outlier.

the QX, profitable and we be profitable at look do X segment last of you If XXXX. again in and expect X were there year to

some is there fund. So outlier QX guarantee the like in

put RBC in So to expect the increase any not year. general, end other the at we do of capital. again

business at our for so We continue RBC improving are we we XXX, go. as approximately that

continues XXXX be profitable In that the our of pure to performance, the terms be business and will expectation same. is

Bobby Garcia

so Yeah, – go that's Peter. ahead a

Peter Costa

or point So remove correct? time to or added the want no clear, I put just to need business at plans this runoff, to capital, no in sell it

Bobby Garcia

was referring the this Peter, So quarter. is Bobby. Juan Jose to

which So one reflect assessment to one-time is saw major that improve. some part RBC it fund impact. was that a guarantee the The continues specifically answer, the there, the of you loss quarter was for was major the the charges,

So open What maintain respect we strategy. dialog with we've on Directors is overall and our continuous table. that's the P&C always the will with business business, had of future of to of options consideration strategic Board a the and the the to always future respect with that our

part of So and its performing can is expected as legacy this that's our P&C as much point. say I as at business.

our adjacencies on Managed and close to the Managed focus to continue Care. what we will Care consider We future

Peter Costa

Okay.

a the in went net little I court. a XX versus time about this new bit total guess bit. so in into identified dig what claims incremental court. only this can, last XXX in XXX If think I from up XX little the business last claims time talked that's I just you a the claims Let's time, time Again, Maria number.

or well? in is of net number So at were gross those that any completely that's court new this claims settled a point just as

Bobby Garcia

press The in is number. reported number the release net we the

last we reconcile closed have So cases against that gave. we the numbers we and it do deduct so

say and the subtract we we as have added, the are new they're reported we've we the and cases where cases any reported. So and closed When reported. served we case cases, that's been cases the where that's number we had the we

Peter Costa

there were cases so settled? Okay,

Bobby Garcia

cases settled. were There

Peter Costa

of of is that into I the If away an terms a average do a we and in went continue look incremental that liability. number claims over the bubble If not the but know you'd that payments. settled it, average, rate, to growth average XXX,XXX great gross way of the you at I for

a used be cases given court bit has the be bit that there higher in the ones grown? actually little your little and expectation that something lower to of for to was a that remaining So caused number

Juan Jose Roman

as with some quarter Peter, pay a cannot you claims by in we vice-versa. claims amount number a country, their paid high a in because average and will you said, of quarters small average be will others

we're case. So as really focusing any other detailed quarter our we by reserve our went and analysis of case through

individual do of with we bigger be to is the average is comfortable continue Really, reserve. cannot – paid handful most on The to you quarter – specific this more is amount to extrapolate that we other. some have that average. be more So cases, the one our reason quarter than them the the a is

Bobby Garcia

thing, I Yeah. add could Peter. If one just

individual we this look Let's basis. say on case at an

cases that business So meaning on sense, settle believe we paying that a basis. a reserve the where same the and we we are is, do amount, when fair we settlement made

fair what is reserve we don't will Therefore, value why same in So we we believe the the it claims. of last the reserve, reserve the have believe our amount. That's quarter. overall impact we

Peter Costa

Okay. in litigated, claims that your some the up litigated Then guess you've adjuster about at of showed about. this anything last I of on point view or Has in claims reports some question that on are are that that public impacted news time? potential the being done being questions many Maria the

Bobby Garcia

don't on focused rely and on that our hand in adjusters are to that We information we We are and the in. experts really P&C at keep Peter. have factor segment. the No, do we try our on

of kinds controversies. we get noise in prefer and extraneous that, say we to those consider involved So not

of claimer, and broker anybody have claims we the as it conversation be and the continue what wants down we'll reasonable claims. value close sure what has with as see with value, we So a else. But want consider much comes adjuster, sometimes any about fair we in to the sit and unfounded can for to claims, any any not with exaggerated public

Peter Costa

Okay. little just bit Medicare more. And in but then question the It like I'll talk last and about that's the queue, a get back Advantage business well. seems maybe going

as that coming competitors? new others share to is board Is your on coming some there. it Where taking to coming you or it from? from You're lives is share opposed

Bobby Garcia

was X% Yes. than a grew market and year slightly of year, I over to think both would market say X%. overall less size the little it the I closer

of So we share some market of competitors. gain our from did some

number the the not within In membership So year. Rico also number enrollment percentage we members. percentage of this and the member the had but highest highest Puerto open highest growth just net we had the percentage in increase the of also our wise highest market Medicare in season, new

Peter Costa

risk numbers So scores another that been coming in already at care managed looked by these are company. with have

scores better is are risk lives Medicare the that than your a fair So probably new typical statement? advantage in

Bobby Garcia

membership some tell than there to typically is new membership can average agents, there, at lower see. this what but it's risk that we also higher we is a be some point There or there new that mix is so going or so you is the is the,

Peter Costa

Thank you Okay. very much.

Operator

[Operator call comments. instructions] management At for would this to over the closing time, to turn like I back

Bobby Garcia

honored Despite environment as Puerto they've shown during transform employer. of the we market company. our you. significant we've employees in that and reflects We This Thank made the level recognition engagement were in Rico strides a challenging the of our best as XXXX.

ongoing down now are three member will pieces have if and on years, laid your and profitability. integrated past delivery a key long-term drive focused you we contribute great an any healthier deliver transformation experience, designing out system us Please the questions communities, that have and growth day. to and Over sustain our we've holistic a to to for and you support. and time reach Thank more

Operator

This ladies today's you, does conclude and teleconference. Thank gentlemen.

this You may lines at disconnect your time.

Triple-s Management (GTS) 29 Feb 202019 Q4 Earnings call transcript